Japanese visitors, who account for about 20 percent of the tourists in Hawaii, are staying closer to home for the traditional Golden Week holiday period, which Hawaii’s travel industry counts on to bolster spring lows.
Higher taxes, a less far-reaching yen, the rising cost of a Hawaii vacation and calendar placement that makes it harder for travelers to capitalize on vacation time are among the reasons tourism officials expect Golden Week traffic to Hawaii to decline anywhere from 4 to 15 percent.
Golden Week, which runs from April 27 to May 6 this year, is especially popular in Hawaii when the days off can be joined with a weekend to produce longer vacation periods. Since this year’s rotation includes one weekday off, April 29, followed by three regular workdays before the next holiday, not many people in Japan are expected to be able to take all of those "in-between weekdays" off.
"Unfortunately, this year is not a great year for Golden Week because the way that the holidays fall doesn’t create a consistent opportunity for a full vacation week," said Kelly Sanders, Waikiki area managing director for Starwood Hotels and Resorts.
While Starwood has good bookings for the second half of Golden Week, which runs from May 3 to 6, Sanders said that the company’s hotels are reporting overall Golden Week declines of up to 15 percent.
It didn’t help that on April 1, Japan raised its consumption tax for the first time in 17 years to 8 percent from 5 percent and has plans to raise it to 10 percent in October 2015 as part of an effort to keep the nation’s economy on track by curbing its debt.
"The consumer tax has been a challenge; we’ve seen an impact in March, April and May," Sanders said. "A lot of consumers rushed to purchase big-ticket items before the tax took effect, so they have less discretionary money available for vacations."
The Japan Travel Bureau, a leading travel agency, reported an 8.7 percent drop in Golden Week bookings to Hawaii. The company, which has a large portion of Hawaii’s Golden Week business, said that it expects to bring 42,000 travelers for the 2014 holidays, down from 46,000 in 2013.
"We have heard that wholesale and tour groups are struggling this year," said Dave Erdman, president and CEO of PacRim Marketing Group Inc.
Jerry Gibson, area vice president for Hilton Hawaii, said the sales tax hike likely caused the company’s isle properties to experience drops of 6 to 8 percent from the Japan market going into Golden Week.
"People are really thinking about their economy and the new expenses," Gibson said. "We started to see a bit of softening in February and March, and we expect that to hold true into April with the new tax."
Likewise, Outrigger Enterprises Group is expecting a flat Golden Week on top of what has already been a soft spring.
"April could very well prove to be the worst month of the year," said Barry Wallace, Outrigger’s executive vice president of hospitality services. "What we are seeing from Japan is not terrible, but it’s not the big bubble that we would have liked to see. More business would have been welcome now — things are really slow."
Even prior to the tax, Japanese consumers were curbing their Hawaii purchasing as they did for most of 2013. The HTA reported that daily spending by Japanese visitors dropped 8.4 percent in February to $290.40 per day, as compared with $317 in February 2013.
"There for a while the yen was substantially stronger than the dollar, and now we are at parity or stronger so naturally visitors from Japan aren’t going to spend as much," Sanders said.
It remains to be seen what role dwindling Golden Week counts will play in April’s bigger-picture woes. Even though some of Golden Week’s importance has faded as Japanese travelers have embraced vacationing throughout the year or at other peak periods like Obon or New Year’s, hoteliers said April’s lackluster overall performance could have used some shine.
"Typically, Golden Week would bring in as much as a third to a half of whatever Japan business that you are already getting. For those hotels that are less reliant on the market, it just brings occupancy up a few extra points. But for those who are big players in this market, it should be boom time," Wallace said. "It’s really disappointing that it’s not."
Erdman said that Hawaii still may get some surge of last-minute Golden Week bookings as independent travelers take advantage of special deals to get away from this year’s particularly cold and grueling winter in Japan.
"Every year there has been an increase in last-minute bookings," he said. "Booking windows are getting shorter."
However, the general consensus among hoteliers is that Golden Week won’t show significant pickup, and the Japan market isn’t likely to show much improvement for a few more months.
"Hopefully, in the summertime, we can start to see a better spend and more volume," Gibson said.
POPULAR PERIOD
Golden Week, a grouping of national holidays in Japan, is typically a popular time for Japanese travelers to visit Hawaii. However, this year, the holiday dates are less favorable for travel:
» Tuesday, April 29, Showa Day: the birthday of former Emperor Michinomiya Hirohito, called Emperor Showa in Japan » Saturday, May 3, Constitution Day: the day in 1947 when the new postwar constitution went into effect » Sunday, May 4, Greenery Day: a day dedicated to the environment and nature because Emperor Showa loved plants and nature » Monday, May 5, Children’s Day: The Boys’ Festival is celebrated on this day when families pray for the health and success of their sons.
Source: Japan-guide.com
GOLDEN DESTINATIONS
The Japan Association of Travel Agents asked seven major travel agencies and wholesalers which international destinations were favored by their clients for Golden Week travel in 2014.
1. Taiwan 2. Hawaii 3. Singapore 4. Vietnam 5. Guam
Source: JATA
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